A recent study found that retirees are spending more than one-third of total Social Security benefits on out of pocket medical expenses in 2014. Even when considering other sources of income for retirees, medical spending took at least an 18% chunk of seniors’ retirement income.
A typical retiree can expect to outlay $4,274 each year on medical costs, not including those associated with long term care. Insurance premiums alone, according to the research published by the Center for Retirement Research at Boston College, made up two-thirds of that total because the premiums are extremely high.
Medical costs for Medicare beneficiaries are important to consider for anyone nearing retirement, since those expenses are expected to grow faster than increases in Social Security benefits beyond 2018.
Meaning that retirees have to put a growing portion of their social security income towards medical care. The primary take away from this research study is that even for those individuals who live on their own and did not use long term care, the expenses associated with medical out of pocket costs are extremely high and a large portion of their income and those spending numbers are only anticipated to grow in the future.
If you have questions about how to best protect the assets you have worked so hard to accumulate over the course of your life, and how to pass them on by minimizing taxes and ensuring a smooth transition, consulting with an experienced estate planning attorney in Massachusetts should be your next step.